DAX Trading Strategy

This is our DTI (DaxTrader Intraday) DAX trading strategy which is a trend-following, momentum-based strategy for short-term DAX and index trades

How To Use The Strategy

How To Use Sierra Charts & Use The DAX Trading Strategy

DAX Trading Strategy Checklist

  • Watch the tutorial video series above
  • Download your trial version of Sierra charts
  • Open up a two-minute chart
  • Use the coloured backgrounds as the bias to help you trade in that direction. (Red is a bearish market and Green is a bullish market)
  • If the candle turns green whilst the background is green – buy
  • If the candle turns dark blue whilst the background is red – sell
  • The dots are the ‘supertrend’ indicator and they are showing us where to put the stop loss for a trade
  • Do not trade if you see a recent yellow candle because this suggests that the price action is stretched too far
  • Set your profit target at 4:1 reward – depending on wherever the stop loss goes
  • Close your trade before the end of the session, don’t hold trades over a weekend
DAX Trading Strategy

DTI DAX Trading Strategy

DAX Short Setup

Notice how we were trading up above the deviation high (that’s the upper band), before retracing back to VWAP (Volume Weighted Average Price – that’s the middle line inside the band). At this point the DTI algorithm produced a sell signal.

For shorts, you look for the candles to turn dark blue, whilst the chart background colour is red.

 

DTI DAX Trading Strategy

DAX Long Setup – Exited Early

In this example, you can see how price tagged the deviation low early on, but the market rejected lower prices. The background chart colour is green, suggesting to look for longs. Once you see green candles, you have a buy setup.

So in this case, we take a long with a stop loss underneath the supertrend dots and then calculate the target to provide 4:1 reward.

Normally,  a trade will be kept open until either it hits the stop loss  or it hits the target. However, you may choose to tighten up your trades when you see the yellow candles. These are formed when price closes above or below the deviation bands. It suggests that price is extended and has a high probability of pulling back/bouncing.

When this happens, you can exit the trade once price closes below the supertrend dot.

DAX Index Trading Strategy

Work / Life Balance

Never be a slave to working. Always set aside leisure time to do the things that you love. You need be doing what you enjoy.

In trading this means setting out specific times that trade and specific times where you can walk away, go out for a run, do something else.

This strategy works best between 8-11am UK time and 1-4pm UK time.

Trend-Following

Basic psychology teaches us that we have a basic human instinct to survive. Well, in the financial markets, that need to survive generally comes in form of following the herd. Following the trend. We can not move the market on our own, because we do not have the capital. So instead, we position ourselves to ride the momentum.

High Reward vs Risk

In these situations you must have a strong understanding of win rates vs reward:risk ratios. Because if you are aiming for 4:1 reward you will get a LOT of stop losses. And this is normal. For every five trades, four of them can be losers, which is 80%. 

Our ideal win rate for this strategy is 25% and higher to cover the commission and spread costs

Runner that uses the DAX trading strategy
features

How To Download The Best DAX Strategy?

Get Sierra Charts

To use this DAX trading strategy you will need to use the Sierra Charts platform. Download and install a trial version of Sierra Charts and take it for a test drive – the free trials are available here

Setup Sierra Charts

Sierra Charts is very powerful and customisable. I have spent years configuring my charts to look this way, so watch this tutorial video to get your version set up like mine quickly.

Contact Me

Once you have Sierra Charts installed and you’ve set it up so it’s ready to go, you will need to contact me with your username (your log in username) and then I can install the software on your account.

Let’s Go Ahead

How To Get The Best DAX Trading Strategy?

Go ahead with a DAX trading signal subscription or any other DaxTrader membership and you get access to the strategy. You can also purchase a longer membership for signals or trader development which includes an excellent discount.

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Service Type: German DAX Trading Strategy

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